Contract Account - Terminologies Used - SS3 Accounting Past Questions and Answers - page 1
What is a contract?
A formal agreement between two or more parties outlining the terms and conditions of their relationship
An invoice requesting payment from a client
A purchase order authorizing a contractor to provide goods or services
A change order requesting a change to the original terms of the agreement
What is a progress payment?
A percentage of the contract value withheld by the client as security for the contractor's performance
Payments made to the contractor during the course of the project based on the completion of specific milestones
Changes made to the contract or scope of work that affect the agreed-upon price and timeline
A document issued by the client requesting a change to the original terms of the agreement
What is retention?
An invoice requesting payment from a client
A percentage of the contract value withheld by the client as security for the contractor's performance
A document issued by the client authorizing the contractor to provide goods or services
Changes made to the contract or scope of work that affect the agreed-upon price and timeline
What is a change order?
A formal agreement between two or more parties outlining the terms and conditions of their relationship
An invoice requesting payment from a client
A document issued by the client requesting a change to the original terms of the agreement
Changes made to the contract or scope of work that affect the agreed-upon price and timeline
What are variations?
Payments made to the contractor during the course of the project based on the completion of specific milestones
Changes made to the contract or scope of work that affect the agreed-upon price and timeline
A document issued by the client authorizing the contractor to provide goods or services
A percentage of the contract value withheld by the client as security for the contractor's performance
What is retention?
A retention is a percentage of the contract value that is withheld by the client as security for the contractor's performance.
What is the purpose of a change order?
The purpose of a change order is to request a change to the original terms of the agreement.